When it was first set up, 1MDB’s initial capital of RM5bn was raised from 30-year bonds. About RM3.5bn of this was invested in PetroSaudi. It later sold this for RM4.2bn and invested in Murabaha notes.
weekly (6 August) reported that 1MDB’s total loans and borrowings rose to RM6.8bn (31 March 2011) from RM4.4bn a year earlier. 1MDB then piled on further debt of RM11bn to finance its investment in the energy sector including buying up Ananda Krishnan’s Tanjung assets for a hefty RM8.5bn. (It is now eyeing the energy assets of Genting, Sime Darby and Bukhary’s Malakoff, reports ).
The company is involved in the 70-acre RM26bn Tun Razak Exchange (or TRX – previously known as the KL International Financial District) – 25 buildings and a new stock exchange – 20m square feet of floor area. It is supposed to serve as a financial services regional hub.
also reported the firm had pumped in RM194m into properties (70 acres for TRX and 484 acres of the Sungai Besi air force base in KL) but these are now revalued at RM826m! How did this happen?
Both TRX and Bandar Malaysia will require RM5.4bn funding for the first phase. Now where is 1MDB going to raise the money from? The government or state-managed funds?
In the process a new word enters our lexicon – subsidies is now replaced with INCENTIVES!
More HERE at Anil Netto’s blog.